(Wall Street Journal) OPEC later in the day refuted a report Wednesday that Saudi Arabia's energy minister warned that oil prices would fall to $50 a barrel if OPEC+ members did not comply with an agreed-upon output curbs, calling the report "completely inaccurate and misleading."

The report cited unnamed OPEC delegates as saying they heard Prince Abdulaziz bin Salman issue the warning during a conference call last week. The Wall Street Journal cited sources as saying he singled out overproduction in Iraq and Kazakhstan.

The Wall Street Journal report also wrote that these warnings were interpreted by other members as a threat that Saudi Arabia was willing to launch a price war to maintain its market share if they refused to comply with the production cut agreement.

However, OPEC stressed that no such call took place last week, nor had any telephone or video conference been held since the OPEC+ meeting on September 5.

The OPEC+ Joint Ministerial Monitoring Committee (JMMC) met on Wednesday and OPEC+ did not change its plan to begin gradually restoring oil production by the end of the year, despite signs of an impending supply glut.

Oil prices have risen more than 5% in the past two days after OPEC member Iran launched a strike on Israel, escalating a year-long Middle East conflict, but global benchmark Brent crude is still hovering around $75 a barrel, down 14% from July, as traders focus on weak demand from the world's largest oil consumer and bloating non-OPEC+ supplies.

While cooling oil prices have provided relief to consumers suffering from years of rampant inflation and justified a shift by central banks toward lower interest rates, it poses a financial threat to OPEC+ members.

Saudi Arabia this week cut its growth forecast and projected a larger budget deficit than previously estimated as the cost of reforming the kingdom's economy exceeds revenue. Meanwhile, Russia relies on energy revenues to finance its military campaign in Ukraine.

Wednesday’s JMMC meeting focused on the failure of Iraq, Kazakhstan and Russia to comply with their agreement to cut production, according to delegates who spoke on condition of anonymity.

While the countries "reaffirmed their strong commitment to the agreement," they mostly continue to overproduce and have yet to start promised compensatory cuts. The countries held separate workshops in September to discuss output levels.

Russia's own data showed that its crude oil production in September was slightly below the monthly target under the OPEC+ agreement, according to a person familiar with the matter at the Russian Energy Ministry. Russia produced 8.97 million barrels per day last month, down about 13,000 barrels per day from August levels. The Russian Energy Ministry did not immediately respond to a request for comment.

At Wednesday’s meeting, the three OPEC+ members “confirmed that they have produced in accordance with the plans submitted in September and have made compensatory cuts,” OPEC+ said in a press release, without providing figures.

OPEC+ plans to gradually lift its voluntary production cuts of 2.2 million barrels per day from December, two months later than originally scheduled.

The alliance has a few weeks to decide whether to go ahead with December’s production increase. Ministers are scheduled to meet on Dec. 1 to review next year’s policy.

As the oil market deteriorates further, analysts including JPMorgan Chase & Co. and Citigroup Inc. have expressed doubts about whether OPEC+ can proceed with its scheduled production increase.

According to the IEA's estimates, oil consumption will grow by less than 1 million barrels per day by 2025, while supply will increase by 50%, leaving the market in surplus even if OPEC+ continues to limit production.

The article is forwarded from: Jinshi Data